Consolidating your existing debts into one smaller monthly repayment can often be all that is needed to put an end to the stress-inducing demands made by nagging creditors.
However, consolidating existing credit commitments should not be considered a cure-all. If used properly restructuring debts through consolidation can help you get debt free faster, by reducing the interest burden of existing borrowings and bringing repayments within budget. On the other hand, if there are more serious underlying problems it may only grant temporary relief before the creditors start their hounding again.
When a debt consolidation loan can be the answer
- If you're paying high interest charges on your existing debts and want to switch to a cheaper alternative.
- If you need to reduce the size of your monthly payments, perhaps because of a reduction in income.
- If you need to release additional money to meet unexpected commitments, freeing up extra cash from your home whilst ensuring your montly repayments don't increase.
When a debt consolidation loan is NOT the answer
- If you've already consolidated your debts several times in the past.
- If this consolidation loan includes debt still owing from previous consolidations.
- If you want to move debts from credit and store cards so that you can start using those cards again.
We are not lenders. We do not arrange loans. We are not brokers for those who make or arrange loans.
If you are looking for an unsecured or secured loan then, as a place to start, it is worth utilising a number of comparison sites, such as Moneysupermarket.com®, Moneyfacts and beatthatquote™ for Remortgages or Credit Cards.
However, what is of paramount importance is that you ensure that any new repayments are affordable. You should also dteremine at the outset what total cost of the finance will be, that is interest and other charges, will be. All the information should be provided in the loan offer agreement, so there is no reason why you should not be fully conversant with the terms of the loan.
Finally, no one is entitled to credit, despite what the Financial Exclusion Propagandists may try to have you believe. The current environment has made it even harder for those with repayment problems to obtain (re)finance, especially at interest rates which can make make refinancing/consolidating a practical solution.